INSIGHTS INTO LITIGATION FINANCE

Transaction Structures in Litigation Finance

Lee Drucker | November 4, 2014

While the adoption of commercial litigation finance is on the rise, the particulars of the practice are still not widely understood. How are litigation finance deals structured? How do lawyers and clients work with funders without jeopardizing the attorney-client relationship? How are litigation-related assets valued? How relevant are champerty issues?

We at Lake Whillans Litigation Finance will be addressing these and other questions; discuss topics of interest around commercial litigation finance; and spark an informative dialogue. We will kick things off by shedding some light on a few frequently asked questions about the structure of litigation finance deals.

Q. Who are the parties to a transaction?

Generally, litigation finance companies transact directly with the claimholder. While the claimholder’s counsel is typically involved throughout the investment process—helping to answer due diligence questions and providing a case budget, for example—the investment contract is structured as a bilateral agreement directly with the claimholder. The attorney-client relationship remains exclusive to the claimholder and its attorney.

Q. Can litigation finance provide capital for activities other than litigation?

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The best way for companies and their counsel to determine if litigation funding is an attractive option is to discuss it with us.

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